Meaning Equity means fairness and sense of justice. It is also a source of Law. For deciding cases, the judges interpret and apply laws to the specific cases. But laws cannot fully fit in each case and these can be silent in some respects. In all such cases, the judges depend on equity and act in accordance with their sense of fair play and justice. Equity is used to provide relief to the aggrieved parties and such decisions perform the function of laying down rules for the future.
In the absence of any rule of a statutory law or custom or personal law, the Indian courts apply to the decision of a case what is known as “justice, equity and good conscience”, which may mean they use their judicial mind to provide relief to the aggrieved party.
Origin Equity and good conscience as a source of law, owes its origin to the beginning of the British administration of justice in India. The Charters of the several High Courts established by the British Government directed that when the law was silent on a matter, they should decide the cases in accordance with justice, equity and good conscience. Justice, equity and good conscience have been generally interpreted to mean rules of English law on an analogous matter as modified to suit the Indian conditions and circumstances.
In 1780, Bengal first introduced maxim ‘justice, equity and good conscience’. Sir Elijah Impey , the first Chief Justice of the Calcutta High Court, ruled that Courts should, in all cases where no specific instructions were given, act according to the principles of equity, justice and good conscience. Judges are given discretion to adopt any rule or practice they deem reasonable in the circumstances of the case before them. This principle was applied in legislation, resulting in various laws and many principles of the English language. This principle was gradually introduced in Bombay, Madras and other provinces of India.
This principle had no definite and specific connotation. It did not mention a specific set of laws, nor does it provide clear guidelines that judges would follow when deciding disputes. In short, it was the judge’s discretion. Judges were entirely free to deliver the judgment of the cases brought before them to the best of their capability to ensure substantive justice between the parties involved. This principle required courts to decide which law to apply, based on reason and justice in each case. This laid the foundation for the judges to rule on a case-by-case basis. In a disputed situation, the judge can use principles based on what he believes to be justice and good conscience.
Justice - The word justice comes from the Latin word, “Jus” meaning right. Justice refers to the fair and impartial treatment of individuals under the law, ensuring that their rights are protected and that legal decisions are made without bias or prejudice. Justice is not merely the right determination and adjudication of disputes and enforcement of the law, but is so comprehensive in its meaning and import that it takes within its ambit the whole of political, juristic, and moral idealism. Every culture has its concept of justice
Equity: Equity in law refers to a system of principles and remedies that developed historically to provide fairness and justice in cases where strict application of the common law or statutory law would lead to unjust or inequitable outcomes. It operates as a parallel system to the common law and is often seen as a means to supplement or complement the rigid rules of law. Where a law is considerably suitable or essentially correct but too severe or unfair in action, then the system of equity allows for a different course to secure substantial justice. There are two main principles of equity: he who seeks equity must do equity he who comes into equity must come with clean hands
Good conscience: Good conscience encompasses the idea of moral and ethical principles guiding legal decisions. It suggests that legal judgments should align with a sense of what is morally right and just, even when specific laws or statutes may not explicitly cover a situation. Conscience refers to the knowledge of one’s act, state, character as right or wrong or it can be referred to as a faculty or principle which determines whether a particular action is lawful or unlawful by approving or condemning them.
Advantages: Flexibility: One of the main advantages of this principle is its flexibility. It allows judges to adapt the law to changing societal norms and values. This can be especially important in situations where statutory law may be outdated or insufficient. Justice and Fairness: The principle is rooted in the idea of achieving justice and fairness in individual cases. It allows judges to consider the unique circumstances of each case and make decisions accordingly. Gap-filling: When there is a legal gap or ambiguity in the law, the principle of "justice, equity, and good conscience" can be used to fill those gaps and provide guidance for resolving disputes. Adaptation to Local Custom: In some cases, this principle allows judges to consider local customs, traditions, and community standards when making decisions, which can be particularly important in diverse and multicultural societies.
Disadvantages: Subjectivity: The biggest drawback of this principle is its subjectivity. What one judge considers just and equitable may differ from another judge's perspective. This can lead to inconsistency in legal decisions. Lack of Predictability: Because the principle is flexible and relies on the discretion of judges, it can make it difficult for individuals and businesses to predict the outcome of legal disputes. This uncertainty can be a disadvantage for those seeking legal clarity. Potential for Bias: The principle's reliance on the judge's sense of justice and conscience can potentially introduce bias into legal decisions. Judges may be influenced by their personal beliefs, values, or biases, which can result in unfair outcomes.
Limited Legal Guidance: Unlike statutory law, which provides clear rules and guidelines, the principle of "justice, equity, and good conscience" offers limited legal guidance. This can make it challenging for lawyers and litigants to argue their cases effectively. Inefficiency and Delays: Resolving cases based on this principle can be time-consuming and may lead to lengthy legal proceedings, as judges carefully consider the equitable aspects of each case.